Like pretty much everyone, I don't think D&D needs "evil", in other words of course it can function without it. IME though, it can be a super useful tool and I find myself "needing" it in order to maximize the fun in my games.
It's funny that others have pointed to problems coming from newer players because those are the ones who have really made me see the usefulness of the concept. A lot of the newer players I have run for are not the stereotypical (and probably never accurate) D&D nerd boys, most are female but IME that makes even less difference in playstyles than it did back a while.
Anyways, what I am trying to get at is that my players see the moral grey in EVERYTHING and it's great fun. Murderhobos they are not, 90% of the time. They and their characters often struggle with killing anything, often even wounding them is guilt inducing. Again though, we have great fun though it's sometimes a bit of a tightrope, especially with anything human-like (don't get me started on animals) to have them see how bad the NPCs are without it getting super dark. If they don't see vividly that they are really bad than at most they are going to end up captured and then questions of how to deal with them.
Basically, it's fun, we appreciate the stakes and the negotiations and the angst... but it's hard... and these same players REALLY enjoy some hack-n-slash, it just doesn't work for them to have their characters kill the lizard men (as mentioned earlier in the thread) or something to that effect. So, a world where Evil exists and they can just kill the; demon, devil, 5e gnoll, etc. without doing a thorough background check or catching them red handed, is fundamentally just more fun for them. Sure, there are middle-ground adversaries like robots, constructs, pop culture zombies, trust me, I use them too but they are a different tool.
IME this kind of player is very common these days; sensitive, feeling it necessary to show mercy if at all possible, and yet still straight up enjoying combat and occasionally wanting that to come without a bunch of baggage ie; prisoners, guilt, being shown/told how bad these guys are.